August 18, 2015

International Trade

 

Cargo that has arrived in Puerto Cabello:

• 30,000 tons of wheat from the USA
• 30,000 tons of sugar from Brazil for state agency CASA
• 16.578 tons of chicken, beef, milk and margarine, from Brazil for state agency CASA

More in Spanish: (Ultimas Noticias, http://www.ultimasnoticias.com.ve/noticias/actualidad/economia/llegan-a-puerto-cabello-30-000-toneladas-de-trigo.aspx#ixzz3j45d2SP6; El Nacional; http://www.el-nacional.com/; El Mundo, http://www.elmundo.com.ve/noticias/economia/industrias/30-000-toneladas-de-trigo-arribaron-al-pais-proven.aspx)

 

Venezuela-Colombia trade is down 38% in the first semester 2015, at US$ 769 million as opposed to US$ 1.235 billion during the same period last year - a 38% drop. More in Spanish: (El Mundo, http://www.elmundo.com.ve/noticias/economia/internacional/comercio-entre-venezuela-y-colombia-cayo-38-.aspx#ixzz3imksF245)

 

 

Oil & Energy

 

Venezuela oil price falls to just US$ 2.50 off 2015 low

Venezuela's weekly oil basket price fell to within US$2.58 of its 2015 lows as oil prices slipped in international markets on economic worries about China, a nuclear deal that would allow Iran to sell more oil, in addition to a U.S. market remaining amply supplied. According to figures released by the Ministry of Energy and Petroleum, the average price of Venezuelan crude sold by Petroleos de Venezuela S.A. (PDVSA) during the week ending August 14 was US$ 41.40, down US$ 1.65 from the previous week's US$ 43.15. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2394525&CategoryId=10717; Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=45079&idc=4)

 

Venezuela imports 3 million barrels of petrol per month

An internal report from state oil company PDVSA shows Venezuela is importing 2.5-3 million barrels of heavy petrol each month from Caribbean facilities and dealer firms, to be used to dilute extra-heavy crude oil. More in Spanish: (El País, http://www.elpaisonline.com/index.php/2013-01-15-14-16-26/internacional/item/182934-venezuela-importa-3-mm-de-barriles-de-nafta-mes; El Mundo, http://www.elmundo.com.ve/noticias/petroleo/industria/venezuela-importa-entre-2-5-y-3-millones-barriles.aspx)

 

 

Commodities

 

Allocating food product sales according to the last digit of customer’s ID card began again in all the establishments of the government distribution network: MERCAL; Abastos Bicentenario, and PDVAL. (Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=45087&idc=3)

 

Alimentos POLAR’s installations have received over 293 inspections by government agencies to date this year. There have been an average of 36 inspections per month. POLAR’s Legal Affairs Manager Mayela Rojas said “the frequency and degree of demand of these visits have intensified as of August 7 to the point of harassment.” (Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=45076&idc=3)

 

 

Economy & Finance

 

Underlying inflation was 213.2% over the last 12 months, according to studies by the ECOANALÍTICA think tank. June inflation was 16.1%, the second highest this year. More in Spanish: (El Nacional; http://www.el-nacional.com/)

 

Credit card use is up 132.7% due to higher inflation that is depreciating basic income. The Bank Superintendent's office reports a 416% increase since 2005. More in Spanish: (Notitarde; http://www.notitarde.com/Economia/Uso-de-las-tarjetas-de-credito-aumento-1327/2015/08/16/590502/)

 

Central Bank opens bid for banknote paper as paper money shortages are reported

The Central Bank (BCV) has announced it is opening a bid to all those companies interested in supplying banknote paper for printing new Bs.50 and Bs.100 bills. The country has recently been hit by a shortage of bills, mainly VEF 100 notes, and some banks restricted the number of bills handed to their clients cashing in checks or withdrawing from their accounts. The public envelope reception and opening will be held next October 9. (Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=45078&idc=2; El Universal, http://www.eluniversal.com/economia/150815/on-the-current-shortage-of-paper-money)

 

The Central Bank has limited the amount of cash available for ATM and credit card withdrawals to VEB 3,000, down from VEB 5,000. More in Spanish: (Diario 2001, http://www.2001.com.ve/con-la-gente/106882/banco-de-venezuela-reduce-el-limite-de-retiros-en-efectivo-.html; El Nacional; http://www.el-nacional.com/)

 

Central Bank to finally publish official data

After an eight-month hiatus, the Central Bank here (BCV) will soon publish its monthly report, according to an off-the-record source close to the institution. (Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=45077&idc=2)

 

 

Politics and International Affairs

 

Support for Venezuela’s socialists slides to 19% ahead of vote

Less than a fifth of Venezuelan voters are planning to support candidates aligned with the ruling socialist party in congressional elections scheduled for later this year. The United Socialist Party of Venezuela, or PSUV, is backed by 19.2% of people ahead of the Dec. 6 election, according to a survey conducted by Caracas-based polling company DATANALISIS between July 10 and 23. Support for the party of President Nicolas Maduro has fallen by almost two percentage points since May as declining oil revenue exacerbates product shortages and inflation. Support for the candidates of the opposition alliance and independents rose to 54% in July from 50.1% in May, according to the poll. Maduro’s support fell by 1.5 percentage points to 24.3% in July, the lowest since January, the survey showed. The poll of 999 households had a margin of error of three percentage points. DATANALISIS estimates that 52% of the electorate will participate in the vote. The polling company’s president, Luis Vicente Leon, said last month that abstention favors the government because it has more money, resources and media access to motivate core supporters. (Bloomberg: http://www.bloomberg.com/news/articles/2015-08-14/support-for-venezuela-s-socialists-slides-to-19-ahead-of-vote; Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2394530&CategoryId=10717)

 

Opposition presents united front in parliamentary elections

The opposition Democratic Unity Conference (MUD) coalition has presented a unified campaign command called "United Venezuela" under its Secretary General, Jesús Torrealba. Its "executive group" will include leaders of Acción Democrática (AD), Primero Justicia (PJ), Un Nuevo Tiempo (UNT), and Voluntad Popular (VP).  The "strategy group" includes Miranda Governor and two time Presidential candidate Henrique Capriles, along with the governors of Amazonas and Lara states, a "personal representative" of imprisoned Metropolitan Caracas Mayor Antonio Ledezma, former legislator María Corina Machado and National Assembly member Andrés Velázquez. More in Spanish: (Infolatam, http://www.infolatam.com/2015/08/17/oposicion-venezolana-presenta-comando-de-campana-unificado-para-legislativas/)

 

673 out of 1012 new polling centers are in pro-government installations

The opposition Democratic Unity Conference (MUD) and the Catholic University Political Studies Center have detected several irregularities in an audit of electoral plans, among them it has been revealed that 673 of the new 1012 polling centers created by the National Elections Council are not located at schools or government buildings, but in communes, unfinished housing projects and shanties controlled by the pro-government gangs. These new voting centers are 7.4% of total registered voters. More in Spanish: (El Nacional; http://www.el-nacional.com/)

 

Six states hold 52% of registered voters

The outcome of the parliamentary voting next December 6 will be conditioned by the imbalance between the number of voters enrolled in Venezuelan states and the number of parliamentarians to be elected in those states. Venezuelans will choose 113 candidates by name; another 51 will be elected by the vote issued by the ballots of political parties in 23 states and the Capital District, and three indigenous representatives will get to the National Assembly by means of lists in three special constituencies. (El Universal, http://www.eluniversal.com/nacional-y-politica/150815/six-venezuelan-states-accumulate-52-of-the-register-of-voters)

 

Foreign Minister tells Kerry relations with the US must be grounded on mutual respect

Venezuela's Foreign Minister Delcy Rodríguez told US Secretary of State John Kerry, to stop "interventionist intentions" against Venezuela. Kerry had said that Venezuela's situation was "very problematic", and had noted that that if Venezuelan authorities do not allow credible international observers and do not release political prisoners before the December 6 parliament vote "it would have a serious impact" on US relations with Venezuela. Kerry added that the US would analyze the vote "very carefully." (El Universal, http://www.eluniversal.com/nacional-y-politica/150817/venezuelan-fm-relation-with-the-us-must-be-grounded-on-mutual-respect)

 

Venezuela to present Essequibo claim at Mercosur Parliament

A delegation of Venezuelan deputies will attend the 33rd Regular Meeting and Special Meeting of the Parliament of the Common Market of the South (Mercosur) (Parlasur), held in Montevideo, Uruguay from Sunday, August 16, through Tuesday, August 18. The parliamentarians will present an agreement concerning Venezuela's claim against Guyana over the Essequibo territory, informed the Venezuelan National Assembly in a press release.

The speaker of Parlasur, Venezuelan Deputy Saúl Ortega, commented that the Venezuelan delegation will explain how the government of Guyana, along with imperialist factors, seeks to take over that territory, disregarding Venezuela's sovereignty. He added that a unanimous resolution in support of Venezuela was expected. (El Universal, http://www.eluniversal.com/nacional-y-politica/150817/venezuela-to-present-essequibo-claim-at-mercosur-parliament)

 

Maduro traveled to Cuba for Fidel Castro's 89th birthday

President Nicolás Maduro and First Lady Cilia Flores have traveled to Havana to join 89th birthday celebrations for Cuba's revolutionary leader Fidel Castro.  Bolivia´s President Evo Morales is also taking part in the events. More in Spanish: (El Universal; http://www.eluniversal.com/nacional-y-politica/150814/maduro-viajo-a-cuba-para-celebrar-los-89-anos-de-fidel-castro)

 

 

The following brief is a synthesis of the news as reported by a variety of media sources. As such, the views and opinions expressed do not necessarily reflect those of Duarte Vivas & Asociados and The Selinger Group.

August 13, 2015

International Trade

 

10,000 steer have arrived at Guanta port

Ten thousand heads of cattle from Brazil have arrived at Guanta port for the government Food Corporation (CEVAL). More in Spanish: (Bolipuertos, http://www.bolipuertos.gob.ve/noticia.aspx?id=25672)

 

 

Logistics & Transport

 

Truckers are refusing to carry price controlled products due to lootings

Truckers are refusing to carry price controlled products out of fear of lootings, after constant thefts they must undergo: an average 4 cases per week. Giovanni Lupi, President of the Central Venezuela Transportation Chamber, reports that it is usual for trucks stuck in traffic to be assaulted and looted. The problem now ranks ahead of lack of spare parts among obstacles to be overcome. Trucks are now not circulating between 7 PM and 6 AM and must hire escorts to get drivers to carry price controlled products. Spare part costs have increased by 300%, which translates in to 40% of the entire cargo fleet being paralyzed. More in Spanish: (El Carabobeño, http://www.el-carabobeno.com/portada/articulo/110497/transportistas-no-quieren-llevar-productos-regulados-por-temor-a-saqueo)

 

Cargo freightage cost to increase 200%

José Petit, of the Association of Small Business and Drivers of Container Cargo at Puerto Cabello (ASOTRACONTAINER) reports that the group has decided to increase cargo freightage from the port to other cities by 200% starting August 18th, due to the cost increases for spare parts and services. More in Spanish: (Notitarde; http://www.notitarde.com/La-Costa/Precios-de-fletes-de-cargas-aumentaran-200-2480565/2015/08/11/583815/)

 

 

Oil & Energy

 

Venezuela says pushing for OPEC, Russia action to stem oil fall

Cash-strapped Venezuela is pushing for an emergency OPEC meeting and joint coordination with Russia to stem a tumble in oil prices, says President Nicolas Maduro. "We're working towards a special OPEC meeting, in coming days we'll announce .... We're making contacts with OPEC governments," he said - and added "We're evaluating the possibility that a very high ranking OPEC meeting be called, and that in coordination with the Russian Federation, President Vladimir Putin, we can advance in taking a series of actions to defend the oil market in the face of this latest fall". (Reuters, http://www.reuters.com/article/2015/08/12/opec-venezuela-idUSL1N10N02620150812; Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=45031&idc=4)

 

Crude oil exports expected to drop by US$ 4.9 billion

ODH CONSULTORES warns that oil exports could shrink by US$ 4.9 during the second semester this year due to the drop in prices. It says that if the average price is US$ 43.15 per barrel and if one assumes volume will remain the same, total sales would be US$ 41.5 billion. More in Spanish: (El Nacional; http://www.el-nacional.com/)

 

 

Commodities

 

HEINZ ketchup and baby food plants have stopped operations due to lack of raw materials in the latter and to maintenance in the former. A spokesman from the plant’s workers confirmed the plant located in San Joaquín in Carabobo state has been paralyzed for a week. (Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=45028&idc=3)

 

COLGATE PALMOLIVE has also stopped one of its plants

Colgate informed its workers in the Valencia plant -via an internal memorandum- its detergent production line will be stopped indefinitely as of August 10 due to shortages of raw material for packaging. Workers of four of the six production lines at this plant will be relocated to the company’s other lines. (Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=45029&idc=3)

 

Auto and motorcycle assembly at a standstill in Venezuela

The automobile sector in Venezuela continued to be hit by lack of FOREX as a consequence of dwindling oil prices.
The motorcycle sector has not been allocated the foreign currency it requires to import the CKD, a kit with the assembly materials for each unit. Overall production in July declined to 412 units from June, when 1,446 motorcycles were assembled, according to figures from the Association of Motorcycle Industrials, Manufacturers, and Assemblers (AIFEM). Moreover, the sector accrues a US$ 812 million debt to their Chinese suppliers, so credit lines are frozen for the time being. (El Universal, http://www.eluniversal.com/economia/150812/car-and-motorcycle-assembly-at-a-standstill-in-venezuela)

 

Beer maker Polar restarts brewing after shortages

Venezuela's largest beer manufacturer says it will restart operations after shortages of raw materials led it to close some breweries. Cerveceria Polar has announced that it's received the malted barley it needs to manufacture the golden brew that is a favorite here. The company makes more than 70% of Venezuela's beer. Last week, bottles of Polar began to disappear from store shelves in Caracas due to difficulty obtaining ingredients. (Associated Press, http://news.yahoo.com/venezuela-beer-maker-polar-restarts-brewing-shortages-185759591.html)

 

 

Economy & Finance

 

Central Bank of Venezuela has failed to release figures for seven months

The Central Bank of Venezuela (BCV) has not published official data on inflation (national consumer price index), Gross Domestic Product (GDP), and shortage of products in the past seven months. This means the BCV has been breaking its own law, which provides that official economic figures must be published within the first days of each month. Recently, the Supreme Tribunal of Justice (TSJ) dismissed a lawsuit brought against the President of the BCV, Nelson Merentes, by NGO Transparencia Venezuela urging him to publish official figures. (El Universal, http://www.eluniversal.com/economia/150811/central-bank-of-venezuela-fails-to-release-figures-for-seven-months)

 

Venezuela holds the largest gold reserves in Latin America

Venezuela tops the list of Latin American countries with the largest gold reserves, according to the latest report issued by the World Gold Council, headquartered in London. The ranking shows that the United States holds the largest gold reserves in the world, with 8,133.5 tons. Venezuela holds 361 tons of gold, which represent 68% of its reserves. The country ranks 16 worldwide, despite the fact that its gold reserves declined from 367.6 tons in June. The price of gold stands at its lowest level since February 2010, at USD 1,072.30 per ounce. (El Universal, http://www.eluniversal.com/economia/150811/venezuela-holds-the-largest-gold-reserves-in-latin-america)

 

Venezuela appeals for 2nd time to World Bank panel in Conoco dispute

Venezuela has appealed for a second time to the World Bank's arbitration panel against its decision in the country's dispute with ConocoPhillips, linked to the nationalization of the company's assets. In a partial ruling last year, the International Center for Settlement of Investment Disputes (ICSID) said that the 2007 takeover by late socialist leader Hugo Chavez of Conoco's oil projects was unlawful. On Tuesday, Venezuela's Attorney General's Office said it formally requested the previous day that ICSID "reconsider its position with respect to the ruling." The nation has requested various reviews of recent ICSID decisions, which critics see as attempts to stall the payment of fines. (Reuters, http://www.reuters.com/article/2015/08/11/venezuela-arbitration-conocophillips-idUSL1N10M2ES20150811)

 

CONINDUSTRIA: Reactivating industry can substitute imports

Venezuela's industrial sector hopes to present the government its proposal to oxygenate the economy and recover local production. The President of the Venezuelan Confederation of Industries (CONINDUSTRIA), Juan Pablo Olalquiaga, says a plan for import substitution requires urgent implementation of the five measures proposed by the industrial sector: securitization of the debt owed by industries to their suppliers, legalization of the parallel foreign exchange market towards a feasible scheme, lifting price controls, returning expropriated companies to the private sector, and establishing links between education and research centers and the companies. (El Universal, http://www.eluniversal.com/economia/150812/conindustria-reactivating-the-industry-will-substitute-imports)

 

 

Politics and International Affairs

 

Regime frees 2nd prominent opponent in just over 24 hours

A former Chavez defense minister turned staunch government critic was granted early release from jail, making him the second prominent opposition leader to be freed in little more than 24 hours. A military tribunal granted retired Gen. Raul Baduel parole after he completed six of a nearly 8-year sentence on corruption charges. A short video of Baduel embracing loved ones was tweeted by his daughter after he was discharged from the military prison outside Caracas, where he's been held alongside Venezuela's most-recognized jailed opponent, Leopoldo Lopez. Baduel's release comes just 24 hours after Daniel Ceballos, the former mayor of the restive western city of San Cristobal, was granted house arrest on medical grounds while awaiting trial for his alleged role in inciting violence during last year's anti-government protests. Combined, the two surprise releases could signal a greater leniency on the part of President Nicolas Maduro's socialist administration, which has come under sharp fire from the U.S. over the imprisonment of some 50 anti-government activists on what human rights groups say are trumped-up charges meant to silence dissent. Ceballos, hours after being reunited with his family, shouted a statement from a second floor window in Caracas, saying his surprise release represented a hopeful sign "that all political prisoners might be reunited with their families." (The New York Times: http://www.nytimes.com/aponline/2015/08/12/world/americas/ap-lt-venezuela-opposition-leader.htm; Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2394338&CategoryId=10717; http://www.laht.com/article.asp?ArticleId=2394332&CategoryId=10717; El Universal, http://www.eluniversal.com/nacional-y-politica/150811/court-grants-home-arrest-to-dissenter-daniel-ceballos)

 

Dissident legislative candidates emerge on both sides

The DELPHOS polling group indicates that some 40% of voters are bent toward a third voting option in the upcoming December 6th parliamentary elections, away from the MUD opposition coalition and pro-government forces, and dissidents could take votes away from both pro-regime candidates and those of the opposition.  Both the MUD coalition and the government's PSUV nominated 334 candidates and 3 representatives of the indigenous tribes for the 167 seats in the National Assembly (including main representatives and alternates), but independents have emerged on both sides. On the opposition splinter groups have emerged in both Lara and Mérida states. On the part of the "chavista" forces, dissident forces headed by Marea Socialista (Socialist Tide) have put forward 99 candidates, and there may be more. They say they will present candidates in 58% of the electoral districts. One "chavista" dissident, labor leader Marcela Máspero, says "Maduro accentuated corruption, political persecution and harassment of labor. Expropriation was a failure and the proof is that 95% of nationalized companies produce nothing". More in Spanish: (El Nacional: http://www.el-nacional.com/politica/Atomizacion-candidatos-signa-comicios_0_682132042.html)

 

US willing to improve relations with Venezuela

US Secretary of State John Kerry says the US is interested in a normal relationship with the Venezuelan government and is talking to Cuban authorities about the matter. He says he spoke to the Cuban regime about "the desire of Washington to increase chances for the Venezuelan people to be protected, respected and represented"; and added that he hopes Venezuela complies with OAS and Human Rights Committee standards on free elections and is accountable to the international community. More in Spanish: (El Nacional; http://www.el-nacional.com/)

 

US denies it is stirring chaos in Venezuela

The United States has denied that the Southern Command, in charge of military operations in Latin America, is plotting against the Venezuelan economy, as President Nicolás Maduro has denounced. A spokesperson for the US Southern Command, emphasized that the Command was neither fostering disturbances in Venezuela nor trying to dynamite the Venezuelan economy or its government. Maduro had claimed that a special committee had been created to produce evidence of an alleged destabilization plan led by the Southern Command he called "Plan Buitre" (Vulture Plan). (El Universal, http://www.eluniversal.com/nacional-y-politica/150812/us-denies-it-is-stirring-chaos-in-venezuela)

 

One out of every four Venezuelans would rather leave the country

A public opinion study by CONSULTORES 21 shows that one out of every 4 Venezuelans would rather leave for another country than stay in Venezuela. 36.4% of those between 18-24 years old would like to migrate. More in Spanish: (El Nacional; http://www.el-nacional.com/)

 

 

The following brief is a synthesis of the news as reported by a variety of media sources. As such, the views and opinions expressed do not necessarily reflect those of Duarte Vivas & Asociados and The Selinger Group.

August 11, 2015

International Trade

 

Venezuela's trade with the US is down 36.61%

Total Venezuela-US trade during the first half of this year was US$ 12.952 billion, a 36.61% drop from last year's first semester, which stood at US$ 20.433 billion, according to a report prepared by the Venezuelan American Chamber of Commerce and Industry (VENAMCHAM), based on US Census Bureau data. Oil exports were 47.57% less, mainly due to the drop in oil prices. More in Spanish: (El Mundo, http://www.elmundo.com.ve/noticias/economia/internacional/venamcham--intercambio-comercial-con-eeuu-cayo-36-.aspx#ixzz3iV9C6Hj6)

 

A rocky path for exports

In 1998 the export of non-oil products brought in 29% of the country's revenues. Today it makes up barely 3% of the country's total revenues, according to figures from the National Institute of Statistics (INE). Procedural hurdles, permits, falling production, foreign exchange controls and economic decrees, not to mention inefficiency, are among the many stumbling blocks to bridging the gap between a packaged product placed in a container and the buyer abroad who would be a potential source of foreign currency earnings. Ramón Goyo, head of the Venezuelan Exporters Association (AVEX) says Venezuela has lagged in this area and that the downward trend in non-oil exports will continue in the coming years if controls and monitoring that further compound the difficulties of exporting remain in place. (El Universal, http://www.eluniversal.com/economia/150808/a-rocky-path-to-exports)

 

 

Oil & Energy

 

Venezuela oil price tumbles even further

Venezuela's weekly oil basket price fell to within US$ 5 of its 2015 lows as oil prices slipped in international markets on economic worries about China, a nuclear deal that would allow Iran to sell more oil, in addition to the U.S. market remaining amply supplied. According to figures released by the Ministry of Energy and Petroleum, the average price of Venezuelan crude sold by Petroleos de Venezuela S.A. (PDVSA) during the week ending August 7 was US$ 43.15, down US$ 2.72 from the previous week's US$ 45.87. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2394108&CategoryId=10717; Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=44997&idc=4)

 

Over 30% of PDVSA’s workers are staging protests in different areas of the state oil company, said Zulia’s oil workers’ representative José Boada. Workers at the San Francisco, Maracaibo and Costa Oriental del Lago docks have begun a series of protests that have resulted in partial stoppage in seven docks. (Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=44998&idc=4)

 

Improvised engineers for PDVSA

The Venezuelan regime is “training” workers to receive degrees as bachelors and superior technicians in careers that will allow them to manage PDVSA and other government key companies, much as it did with the so-called community doctors. Courses offered, professors and students in this university do not comply with the requirements set by the traditional university system. (Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=44988&idc=4)

 

 

Commodities

 

Looters target Venezuelan food stores as shortages spark frustration

Venezuelan supermarkets are increasingly being targeted by looters as lines and prolonged food shortages spark frustration in the nation struggling with an economic crisis. Shoppers routinely spend hours in lines to buy consumer staples ranging from corn flour to laundry soap, turning lines into venues for shoving matches and frequent attempts to plunder shops. 56 lootings and 76 looting attempts took place in the first half of 2015, according to the Venezuelan Observatory of Social Conflict, which based the figures on media reports and testimony of observers around the country. More frequent than these serious events are minor melees that ensue when delivery trucks arrive at stores carrying prized products such as chicken or milk. Lines are increasingly filled with smugglers who buy subsidized goods and resell them at a profit on the black market or in neighboring Colombia, generating tension between resellers and those trying to stock their own kitchens. Local food producers ranging from neighborhood bakeries to an industrial pasta maker have halted or slowed operations for lack of raw materials or machine parts. Obtaining low-cost food and medicine, once the hallmark of the Hugo Chávez era, has become a daily struggle. (The Guardian, http://www.theguardian.com/world/2015/aug/07/looters-target-venezuelan-food-stores-as-shortages-spark-frustration)

 

COLGATE PALMOLIVE stopped producing powdered soap

Workers at the COLGATE PALMOLIVE detergent plant in Valencia have been notified by the company that powdered soap production has ceased indefinitely due to lack of packaging material. The flier indicates the company has been losing on detergent production for months because official prices do not cover production costs. (El Nacional; http://www.el-nacional.com/)

 

Poultry farms shutting down for lack of feed

Rafael Moreno, President of the Táchira State Poultry Association, reports more farms there are closing down due to lack of feed, baby chicks and medicines. (El Nacional; http://www.el-nacional.com/)

 

 

Economy & Finance

 

Venezuela ‘terrorized by oil price drop’

Amid lower oil prices, Venezuela is struggling to maintain the social spending that characterized the Chávez era. Crude accounts for 96% of export revenues: a halving in the oil price over the past 14 months means revenues have slumped by about US$ 36 billion compared with the average of the previous two years, when the government raked in almost US$ 79 billion. The fall in oil prices has inflicted massive pain on exporting countries, widening budget deficits and weakening currencies around the world. Energy companies have been forced to lay-off thousands of workers and scrapped multibillion-dollar projects. But Venezuela is facing the greatest economic threat of any of the world’s major producers. With shortages of basic goods — from milk to nappies — becoming more acute each day as imports shrink, it is not only populist housing projects that are likely to be shelved, warn observers.  “Venezuela is running on fumes,” says Russ Dallen, who heads investment bank, LATINVEST. “The current oil income is insufficient to allow the country to pay its debts, fund its imports and service its foreign bonds.” The debt — issued by the government and a handful of state-run companies including the oil group PDVSA — adds up to a total of US$ 128 billion to be paid back over the next 24 years. But US$ 6.3 billion of that falls due before the end of the year, according to Bank of America. So far Caracas has been able to keep paying its foreign bond creditors by selling assets, securitizing oil debts and raiding its foreign reserves, burning through more than US$ 7billion since late February. They now stand at US$ 16.9 billion, one of their lowest levels in the past decade, according to central bank data amid fears that the coffers could run empty in the first quarter of 2016, triggering a possible balance of payments crisis and knock-on implications for heavily exposed bondholders. The economy is forecast to shrink by 7% this year. This is not solely due to a fall in the oil price. The mismanagement of the industry — the failure to invest — and a series of unsuccessful nationalizations are key to understanding Venezuela’s plight. (The Financial Times, http://www.ft.com/intl/cms/s/0/c9c4b05c-0b81-11e5-994d-00144feabdc0.html#axzz3iM8zNJnr)

 

JP Morgan says that Venezuela's economic crisis will be worse than expected

The firm had estimated GDP contraction for 2015 at 5.5%, but since the crisis has been worse than expected and no steps have been taken to meet it, it has changed its estimation to a 8% GDP contraction. It also expects inflation to hit 200% by the end of the year and the forcecast continues worsening. JP Morgan says "the lack of official reports has made us revise our prognosis for 2015, which reflects greater deterioration than we previously expected". More in Spanish: (El Nacional; http://www.el-nacional.com/)

 

TPCG Group reports that drawing funding from the PETROCARIBE system appears exhausted

The international consulting firm says most of the debt under this agreement is currently in the hands of countries with few possibilities to take advantage of recent refinancing, such as the ones done by the Dominican Republic and Jamaica. It claims only greater cuts of crude oil shipments will allow putting a limit to the cost continuing with the agreement costs Venezuela. (Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=45006&idc=4)

 

High cash withdrawals restricted at banks

Zulia state’s regional daily PANORAMA reports that individuals have been told at different banks they can withdraw up to Bs.20,000-Bs.40,000 due to shortages of high-denomination bills, money fleeing through the border and problems with paper money to print bills. The situation has been echoed in other states as well. (Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=45005&idc=2)

 

"Simplification" will not mean lifting FOREX controls

Pro-government legislator Alexander Dudamel, a member of the Finance Committee at the National Assembly, says foreign exchange simplification will not mean lifting foreign exchange control. His reference is to a proposal by former Chavez minister of finance Rodrigo Cabezas. Dudamel says: "The government will not let foreign exchange control slip from its grasp, because even with that measure in force, speculation is ravaging the economy," he commented. He stressed that the government needed to maintain foreign exchange control along with appeals for dialogue with productive sectors, plus improvements in foreign exchange disbursements, to build more trust. (El Universal, http://www.eluniversal.com/economia/150808/simplification-does-not-mean-lifting-forex-control)

 

FEDECAMARAS open to talks with Maduro

Francisco Martínez, President of the Venezuelan Federation of Chambers of Commerce and Industry (FEDECÁMARAS) has said the institution expects dialogue with the President  after a meeting held last week with the Vice-president of the Congress, Deputy Elvis Amoroso. Martínez says that both private and public companies have long expected to hold unbiased and sincere talks to address the root causes of the country's problems. He also asked the vice-president of the Parliament to publish economic indicators collected by the Central Bank of Venezuela, so all productive sectors can be aware of real inflation rates here. (El Universal, http://www.eluniversal.com/economia/150810/commerce-chamber-expects-unbiased-talks-with-the-executive-office; Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=44996&idc=2; http://www.eluniversal.com/economia/150810/national-assembly-commerce-chamber-talks-move-forward)

 

 

Politics and International Affairs

 

Maduro and Granger invited to meet at the UN

Guyanese Foreign Minister Carl Greenidge has confirmed that UN Secretary General Ban Ki-moon is seeking to set up a meeting between his country's President David Granger and Venezuela's Nicolás Maduro, to discuss the Essequibo border dispute during the upcoming UN General Assembly in September. More in Spanish: (El Universal, http://www.eluniversal.com/nacional-y-politica/150811/invitan-a-maduro-y-granger-a-reunirse-en-la-onu)

 

Venezuela's first transgender candidate to run for Congress

The first transgender politician to run for popular election in Venezuela has registered as candidate for Congress as part of the opposition bloc, promising to advance gay rights in the traditionally macho society. Lawyer and gay rights activist Tamara Adrian had to register under her given name Thomas Adrian despite a 2002 sex change, because Venezuelan law does not allow anyone born male to legally become female or take a woman's name. "We're going to fight so that everyone gets respect," said Adrian, amid a tussle of candidates and cheering supporters at the gates of an elections authority office in Caracas. Adrian is running with the opposition party Voluntad Popular, which includes some of the most outspoken critics of President Nicolas Maduro. Two gay candidates are also running with Voluntad Popular. (Reuters, http://www.reuters.com/article/2015/08/07/venezuela-politics-idUSL1N10I1BJ20150807)

 

Prominent American lawyer John Pate murdered in his apartment in Venezuela

Prominent lawyer John Pate, a US citizen, was stabbed to death by assailants in his apartment in Caracas on Sunday evening. Pate, 71, was a member of the Editorial Board of the Caracas Daily Journal, the predecessor of the Latin American Herald Tribune. He received his J.D. law degree from Boston University in 1969; and an M.A. and an M.A.L.D. from The Fletcher School of Law and Diplomacy at Tufts University in 1971 and 1972, respectively. He was Vice Chair of the Latin American and Caribbean Law Committee in the International and Business Law Sections of the American Bar Association. Pate came to Venezuela as a professor of International Business and Latin American Integration at the Institute for Higher Administration Studies (IESA, 1974-1977); and later was a founding member of De Sola Pate & Brown. He served in numerous institutions, was a Director of the Entrepreneurial Center for Conciliation and Arbitration – CEDCA, Director of the Centro Venezolano Americano – CVA, and a member of the Legal Affairs Committee of VENAMCHAM. His first wife, Gertie Paez Pate, a well-known Peruvian painter and descendant of Venezuela's first President José Antonio Páez, died of cancer in 2007. According to police, the criminals reportedly entered his apartment with the intent to rob him, but instead killed him with multiple stab wounds. His companion, Sally Evan Oquendo, 67, was wounded and is hospitalized. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2394180&CategoryId=10717)

 

 

The following brief is a synthesis of the news as reported by a variety of media sources. As such, the views and opinions expressed do not necessarily reflect those of Duarte Vivas & Asociados and The Selinger Group.